Washington:A US federal court has struck down President Donald Trump's new global tariffs in another major blow to his administration after an earlier Supreme Court loss on the issue.
In a 2-1 ruling Thursday, the three-judge panel of the Court of International Trade in New York said the 10 percent worldwide tariffs were illegal and went beyond the authority given to the president by Congress.
The tariffs were deemed “invalid” and “unauthorised by law” by the court, which ruled in favour of small businesses who had challenged the measures. But one judge disagreed, saying the president has broader latitude under the law concerning tariffs.
Its importanceThe Trump administration is expected to challenge the ruling. The case would first go to the US Court of Appeals for the Federal Circuit in Washington and could eventually reach the Supreme Court again.
The row is over temporary 10 per cent global tariffs imposed under Section 122 of the Trade Act of 1974 after the Supreme Court in February struck down even steeper tariffs Trump imposed last year on virtually all countries. The current tariffs were set to expire July 24.
The new ruling applies to just three plaintiffs — the state of Washington, spice company Burlap & Barrel and toy maker Basic Fun!. Legal experts said it was not clear if other businesses would still need to pay the tariffs.
“We fought back today, and we won, and we’re just so excited,” said Jay Foreman, CEO of Basic Fun! after the verdict.
Trump administration setbackThe ruling is a further legal setback for Trump’s attempts to shield the U.S. economy with broad import taxes.
Last year, Trump cited the 1977 International Emergency Economic Powers Act (IEEPA), which declared America’s long-standing trade deficit a national emergency to justify sweeping tariffs. But on February 28 the Supreme Court ruled the law did not authorise such measures.
The US constitution gives Congress the power to impose taxes and tariffs . Congress can delegate limited power to the president .
Despite setbacks, Trump is widely expected to look for other ways to bring back tariffs. The administration is currently pursuing two trade-related investigations that could potentially lead to new import duties.
One study by the Office of the US Trade Representative is looking into whether 16 trading partners, including China, the European Union and Japan, are overproducing goods and unfairly hurting American manufacturers.
A second investigation is looking at whether 60 economies, from Nigeria to Norway and representing 99 per cent of US imports, are doing enough to end the trade in goods made with forced labour.